As we hear the news from America recently that a 46-year old restaurant worker with several children is now serving a 25 year prison sentence for selling pain medication to a police informant, it has become increasingly clear that the War on Drugs has gone too far. This is a government policy that incarcerates many inner-city blacks, and is therefore unequal in its application. People are going to prison for comparatively minor crimes, and causing great economic and personal loss to the communities they are from. It is time to end this policy and focus on rational harm minimization policies that do not treat users and low-end sellers like criminals.

Trade liberalisation can be defined as the progressive removal of tariffs, quotas and subsidies. There is a general consensus among economists that trade liberalisation has been beneficial for the Australian economy. As Adam Smith showed, the gains from specialising in one's comparative advantage and buying from abroad that which cannot be produced cheaply locally, outweigh any temporary job losses. Two factors were responsible for bringing about tariff reductions in Australia. First, the inflationary pressures produced by Keynesian government intervention forced the Whitlam Government to cut tariffs by 25% in 1973. Although unions lobbied to reverse the changes or offset their impact, tariffs never returned to the high levels of the 1960s. Second, Australia's declining productivity levels in comparison with other developed nations placed pressure on policymakers to dismantle Prime Minister McEwen's notion of "protection all round", the rationale being that exposing firms to competition would lead to an efficient allocation of resources and improve external stability. Further dismantling of "the Australian settlement" came with the tariff cuts in 1988 and 1991. Despite being elected on a social democratic platform, sluggish economic growth and declining real incomes led Prime Minister Hawke to implement phased automobile tariff cuts. By the early 1990s all manufacturing tariffs had been reduced to a maximum of 15%. Barriers to aviation markets, as well as quotas on textile and manufacturing imports, were also gradually removed. The starkest illustration of the scale of reforms is the decline in government revenue formerly sourced from tariffs. The Productivity Commission was most influential in advocating a reduction in tariffs. As the political climate changed, the view that public opinion was supportive of protectionism was challenged. Andrew Norton points to a 1997 Morgan Poll that found a majority of respondents agreed lowering tariffs would encourage industries to become more competitive. With public opinion seemingly onside, the Howard Government committed itself to the 1994 Bogor Declaration on free trade, continuing the process of lowering effective average rates of assistance.

Imagine you are an entrepreneur. As a businessperson, would you start a venture where you were forced to pay workers $100 an hour, a rate which is well beyond what you could earn from them? No, you wouldn't open a new enterprise if you were guaranteed a loss. Therefore, the only businesses that will thrive under such conditions are those which are sure to recover the cost of labour plus the cost of capital, and also compensate themselves for the enormous risk of opening a business in the first place. This argument, which is persuasive with a $100 per hour wage rate, can be repeated incrementally down the ladder. Labour economists have devoted much effort to empirically estimating the effects of minimum wage legislation on the employment levels of various age, race and gender groups. It is now widely agreed that increases in minimum wages do reduce employment opportunities, especially among teenagers. One example comes from 1980 in Zimbabwe, where a government decision to set a minimum wage of $45 a month backfired dramatically, causing the dismissal of more than 5,000 workers. Studies on the subject of poverty have found that minimum wage legislation has only a minor effect on the distribution of income. This finding is not surprising, because not all low-wage workers are members of poor families. Many workers on the minimum wage, especially teenagers, are second earners in middle or upper class families. Perversely, the minimum wage ends up hurting those it is supposed to help. It is clear that the poorest and unskilled labourers are the ones who are crowded out of organised job markets when minimum wages are imposed.

The minimum wage would not be such an issue if it weren't for politicians who have capitalised on the general public's perception that wage controls protect the poor from exploitation. But if the poor are in trouble, what is required is to upgrade their skills, and to shift their supply to sectors where market demand is growing. This is not an instantaneous process, and some may desire that a social welfare system offer temporary relief in the interim. But it is wrong to penalise small businesses by placing on them the burden of making unskilled workers wealthier than the market will support. Why kill the hen (entrepreneur) that lays the golden egg (of jobs)?

There are three main types of ideas. For simplicity, I have called them Type I, Type II and Type III. What differentiates developed countries from Third World nations is that large numbers of Type II ideas have been trashed in favour of the scientific method. Each generation and place must derive different truths (that is, Type I ideas). For instance, in the 18th century thinkers would have written against monarchy. But in the 21st century, Type I ideas would aim at clarifying misconceptions about capitalism, because it is already understood that kings and queens are not appointed by God. After a hundred years, capitalism might be understood as being fundamentally good, and the truths which will need to be communicated will become different. By then, we would have understood more about Type I and Type II ideas. Some ideas might transfer from Type I to Type II. That is how the world progresses: by trashing its bad ideas.Type I: Ideas which are essentially correct. Some ideas can be partly correct, and may need refining, such as Newton's laws which were refined by Einstein. But Newton was basically correct. Milton Friedman's monetary work would also fall into this category. Other ideas might have only been partially explored and may result in very powerful results in the future. That is why science is continually yielding more and more secrets of the universe. It is one's job as a student of truth to quickly recognize as many of these Type I ideas. The more Type I ideas one knows and the better one knows them, the quicker living standards improve.Type II: Ideas which are essentially false. These include things like the earth being flat, that communism is feasible, or that the Aryan or any other race of men (such as white, black, green or yellow) is superior to others. It is one's job to quickly identify the ideas of Type II category and to place them in the rubbish bin meant for these ideas, in one's mind. We should not forget to flush out this trash every now and then by repeating in our minds the arguments about why that idea was wrong.Type III: Ideas which can never be proved to be right or wrong. The typical example of this is the existence of God. Even if we go far into the past, we get stuck with something always, behind which is an impenetrable vacuum. Before the Big Bang, what was there, and who created all that energy which drives the world? Is there only one universe or multiple universes? These questions can only be answered through beliefs. As Voltaire said: "If there were no God, it would be necessary to invent him." Life is so difficult and trying at times that it is good to have a God to pray to. But we should be mainly interested in extracting from religion a deep, Type I truth.

Contemporary events in fields such as law, economics or politics often force ideologies to test their theoretical framework in the real world, and demographic changes in society can place strain on an ideological support base. Ideologies must be responsive to criticism if they are to continue as competitors in the battle of ideas. The Great Depression of the 1930s was widely depicted as a challenge to the rise of liberalism as the dominant ideology for structuring society. Variants within liberalism arose as a consequence of the economic depression, and the depression served to strengthen the supporters of big government liberalism. Two recognised variants of liberalism are classical liberalism and social liberalism. The former is a more anti-government ideology, while the latter recognises a role for government in many more areas than classical liberals would permit. Classical liberals support free trade, oppose big government, prefer free-market solutions to environmental problems, and advocate a peaceful foreign policy. In brief, this form of liberalism would shrink the State dramatically and allow private enterprise, churches, and self-help groups to play the leading role in civil society. Government would be limited to enforcing contracts and protecting private property. Some authors in the classical tradition include: Ludwig von Mises, John Locke and Thomas Jefferson. A modern day proponent is Congressman Ron Paul. Social liberalism, on the other hand, developed much of its foundational elements from the utilitarian writings of John Stuart Mill. Mill wrote of the 'Greatest Happiness Principle', which can be interpreted as requiring the government to undertake positive measures that enhance social welfare. While Mill makes similar a priori assumptions about self-interest, social liberalism adds a welfare dimension not found in classical liberalism. Left-wing politicians in many Western countries (for example, Tony Blair's social democratic Labor Party) have been inspired by this form of liberalism. Classical liberals disagree with social liberals because they dispute the idea that liberalism is an ideology of welfare. Rather, it is the fundamentals of individual liberty, limited government, free markets and peace that matter. The main areas of disagreement arise with the positive versus negative interpretations of freedom, and the respective roles for government these entail. For classical liberals, the role of the State is restricted to that of an umpire operating within, and enforcing, democratically expressed rules. But social liberals would argue that it is legitimate for the State to redistribute income from the rich to the poor if this increases overall utility.

The spread of liberal ideas has been precipitated by more than 250 years of historical experiments. Economic thought can be said to have evolved since the father of modern economics, Adam Smith, published "An Inquiry into the Nature and Causes of the Wealth of Nations" in 1776. Karl Marx then wrote his famous work, "Das Capital", in 1867. It was a book spurred on by his belief that working conditions for the proletariat class were far from acceptable, as compared to the bourgeoisie. In the previous century, before the emergence of capitalism, working conditions were probably worse. More recently, John Maynard Keynes gained public prominence with "The Economic Consequences of the Peace", which correctly predicted that the reparations demanded by the Allies at the end of World War I would have disastrous consequences because Germany could not afford to pay them. Another book written by Keynes, "The General Theory of Employment, Interest and Money", published in 1936, argued that laissez-faire was an obsolete theory and economies left to their own devices could become trapped in depressions. Keynes revolutionised the way the world thought about economics but, by the 1970s, the use of his policies to solve economic problems started to go out of fashion. People like Milton Friedman offered valid reasons for the emergence of stagflation (growing unemployment and high inflation) that plagued the 1970s, fuelling doubt about the efficacy of Keynes' policies. The monetarists, led by Friedman, argued that Keynes' policies had led to larger budget deficits and inflation due to the excessive growth in money supply caused by the deficits. While Keynes saw the Great Depression as a consequence of the failure of markets, Friedman concluded that fault lay with government. Joseph Schumpeter in his book "The Theory of Economic Development", wrote that a depression, even an extended one, is no reason to doubt capitalism.Soon Friedman became the public face for a whole school of economic thinking, and what he advocated began to be keenly listened to by many world governments; his push for a restoration of market-driven forces to economic decision-making was well on its way.